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Searching For Social Value: The Key Role Of Not-For-Profit Provision

Every time Halton borough council buys a service, from housing support to specialist treatments, it aims to include one social value outcome. Social value - a way of purchasing services that recognises additional social, economic and environmental benefits beyond the direct buying of goods - is at the heart of the borough's contracts.

The Cheshire borough, which drafted its own charter and procurement framework for social value, has won government plaudits for its approach. The Office for Civil Society is currently showcasing providers with expertise in social value and/or impact management, to work with commissioners in practically applying the Public Services (Social Value Act) 2012. Recently the Office of Civil Society launched a series of case studies showing how providers apply social value.

To get the most value out of public spending, commissioners are being asked to widen their horizons beyond the cost of a service and focus instead on the value of the outcomes delivered. The need to raise the profile of social value has never been more important at a time when the sector is experiencing the most extreme austerity placed upon it.

The not-for-profit care and support sector is driven by social justice and is therefore ideally placed to support and progress the social value agenda. Voluntary sector organisations champion the rights of people who experience social inequality and reinvest any surplus from trading activities for social good - these activities see charities investing in local communities, building the capacity of volunteers and providing valuable services that, frankly, no public authority has the means of commissioning at a time of fiscal stringency.

The sector has long argued that commissioners should prioritise social value over simply efficiency or the lowest price. In all too many areas there is an over-emphasis on procurement of services focused on crude hourly rates of provision, rather than commissioning driven by outcomes for people. Voluntary social care organisations know that building social capital and recognising innovation and community engagement makes support more effective and sustainable in the long term. But short term cycles of re-assessment of disabled people's needs alongside the 'merry go round' of costly re-tendering exercises detract from the prize of longer term, and sustainable, developments.

The need to put social value squarely on the social care map is driving the co-production of VODG's social value toolkit. Currently under development, it is designed to mainstream social value for providers. Our project is well timed; the introduction of the Social Value Act over three years ago ensures that the burgeoning approach is here to stay. The act, a response to the Marmot review of health inequalities with its compelling social justice and economic case for action, requires public authorities to consider social and environmental value when choosing suppliers.

For care and support providers, this offers the potential for stronger engagement with commissioners who must now consider community-based organisations and innovative ways of buying services. Third sector providers can use innovation to their competitive advantage and demonstrate additional social benefits, ranging from jobs for people who have been long-term unemployed to involving those who might otherwise feel disengaged.

So what can providers do to drive forward the social value approach?

An initial step is to create a social value statement, vital if an organisation is to show commitment to delivering social benefits. A statement should include consideration of the relationship between social value and the corporate social responsibility (CSR) policy. Combining both into a single document, for example, or structuring activity around the UN Sustainable Development Goals, may make it easier for staff to implement.

Another important action is to align social value activity with the business planning processes, the concept will be an integral part of the business, rather than an unrelated add-on. Evaluating social value activity and sharing good practice within the organisation should also be part of the statement. For example, how easy is to replicate practices across staff teams and geographical areas?

Additional steps include providers engaging earlier with commissioners. In some areas, commissioners consult before and during the tender process. This offers the chance to grab the commissioners' attention early and influence the social value elements of a tender. Organisations preparing to bid for contracts should also gather evidence about the social benefits already being delivered and be able to show how impacts are monitored and reported.

Measuring social value, however, can be a challenge. For instance social benefits like greater social inclusion, employability, personal confidence or community cohesion are difficult to gauge. This is reflected by the fact that no council has yet published an evaluation of savings made as a result of the Social Value Act.

The most widely established way of measuring social value is Social Return on Investment (SROI), which tries to capture social impacts and translate them into a cost ratio. However, SROI can be costly and complex to deliver, especially when added to the cost of contract monitoring.

Another way to measure impact is if the commissioning authority collects evidence of how social value is delivered alongside its existing duty to gather data on contract monitoring. Alternatively, some authorities ask providers to suggest their own performance monitoring system as part of the tendering process, this ranges from key performance indicators to case studies.

Challenges are, of course, to be expected when spearheading innovative ways of working. Halton borough council, for example, have some suggestions for others pursuing the social value path. Among the tips on what to do and what to avoid, it is vital to focus on local need and the most pressing priorities first so the impact and potential of social value is not diluted. As for what helps, enlisting the support of "social value champions", in commissioning and provider bodies, will drive the new way of working.

To support the growing social value agenda, VODG will be drawing on a series of case studies from across our membership to inform the forthcoming guide. In the meantime, providers in areas where commissioners are dragging their heels over social value should ask about plans to implement the agenda, and offer to help define priorities and criteria.

Where commissioners have signalled an interest in social value, providers need to ensure they get involved early in engagement events; this means social care services are better positioned to help shape social value and enable the people using services to better influence local priorities.

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